- The average price of a used car reached £17,801 in November – up 4.7% year-on-year
- As expected, and in line with pre pandemic norms, November records -0.4% decline on October
- Average prices remain up circa 45% on pre-pandemic levels, with no signs of a correction
Despite wider economic trends, the latest data from Auto Trader’s Retail Price Index, reveals used car retail prices remain stable and continue to follow typical seasonal trends. The data, which is based on circa 900,000 daily pricing observations, shows that the average retail price of a used car in November was £17,801, marking a 4.7% year-on-year (YoY) increase on a like-for-like basis, and the 32nd consecutive month of YoY growth.
Although the rate of YoY growth is easing (down from the all-time-high of 32.2% recorded in April 2022), last month’s performance remains very positive, with average prices increasing on the massive 29% YoY growth recorded in November 2021. And by applying a longer-term view, it’s evident just how robust used retail prices are, increasing a whopping 45% on pre-pandemic November 2019 - approximately £2,000 above the level expected under more normal trading conditions.
As is normal and expected for this time of year, retail prices – the price advertised to car buyers – saw a marginal decline between October and November, dipping -0.4% on a like-for-like basis. This is consistent with pre-COVID month-on-month trends (e.g. -0.4% in 2018, -0.2% in 2017, -0.5% 2016, and -0.5% in 2015), and a consequence of the market slowing down during the run-up to the Christmas period. It’s likely the month-on-month (MoM) softening will continue into December, before beginning to rise again in the New Year.
Demand has softened, but remains comfortably above pre-pandemic levels
Again, as is typical for this time of year, there’s been a softening in levels of consumer demand. However, whilst down -2% on last year’s record levels, consumer engagement on Auto Trader remains strong, with the volume of advert views up 11% against the more ‘normal’ trading conditions of 2019.
A further indicator of market health is the speed in which used cars are leaving retailers’ forecourts. Like the wider seasonal trends observed across the market, average days to sell are gradually increasing as we approach the end of the year, rising from 25 days in October, to 30 last month. However, with November 21 and 20 recording an average days to sell of 31 and 33 respectively, used cars are still selling faster than previous years.
Commenting on the data, Auto Trader’s Director of Data and Insights, Richard Walker, said: “Despite the broader economic uncertainty, the ongoing year-on-year price growth supports our cautious, but confident, outlook for the used car market. The evidence of our retail data should give retailers the confidence to buy knowing the robust trade margins still available, even during the typically quieter festive period.
“The metrics we’re seeing are in line with what we would expect to see at this time of year, and although it would be easy to interpret the month-on-month softening as a sign of a looming crash in prices, we are not seeing any signs of this. With levels of demand remaining robust, and no indication of a significant improvement in levels of supply anytime soon, we can expect used car prices to remain stable into the new year.”
Used EV prices declining, but pockets of demand remain
Looking at the data at a more granular level, average retail prices for used electric vehicles (EVs) are continuing to fall, with November recording the third consecutive MoM decline. As a result of a number of factors, not least levels of supply moving ahead of consumer demand, the average price of a second-hand EV (£37,919) fell -2.5% between October and November. Plug-in hybrids are recording a similar decline, falling -1.8% over the same period. In contrast, the average price of a used petrol (£16,279) car was down a comparatively conservative -0.2% MoM, whilst diesel (£16,696) was flat.
The electric market is still in its infancy, so market dynamics can fluctuate, which is reflected in the extraordinarily high levels of consumer demand for the newly launched MG4 – it only started taking orders at the end of October but is already the top performing new EV on Auto Trader. This is a common trend – when a new comparatively affordable EV launches, they attract a big share of the market very quickly, showing that there are very strong pockets of demand when the right vehicle is available at the right price.
Sue Robinson Chief Executive of the NFDA, added: “The used car market remains in a strong position with franchised dealers and independent retailers benefiting from robust used car prices and sustained levels of consumer demand. Auto Trader’s Retail Price Index reveals year-on-year growth is softening but remains very positive at nearly 5% on top of previous records, and importantly, we are yet to see external factors relating to the broader economy and energy bills impact levels of demand in a significant way.”